Ethiopia, Africa’s biggest coffee producer, will benefit from unusually dry weather in Brazil that has lowered the output and helped lift the price of Arabica beans. Arabica prices surged to a three-year high – to over 200 US cents per pound – in October, which is expected to lift Ethiopia’s coffee export earnings by 25 per cent to $900m this year.
But Ethiopia is missing an opportunity to make a lot more money from arabica, which originated in the country’s highlands, and is considered the superior of two main varieties of coffee bean (the other, robusta, is more bitter and tends to be used to make instant coffee).
Brewed coffee may not be an obvious market in southeast Asia, a region with a strong tea-drinking culture thanks to the region’s ethnic Chinese populations.
But Costa Coffee and its rivals think otherwise. The UK-based coffee chain – part of the London-listed Whitbread brewing and hotels group – is in the early stages of expanding into the region, home to 620m people and a growing middle class.
Is not tailoring your food and drinks to Chinese taste a form of “food neo-colonialism”, as Roland Decorvet of Nestle China put it last year? Illycaffe, the Italian premium coffee roaster, thinks not.
Even as it looks to grind away Nestlé’s and Starbucks’ lead in China – a market that’s posting double-digit growth and which is worth about $1.5bn last year – the company says it has no plans to “localise” it product for the Chinese market.
Brazilians sure love their coffee but the government’s offer to buy 3m bags of the stuff on Wednesday still took the market by surprise.
President Dilma Rousseff announced the government would help out its struggling coffee producers by offering put options to buy up to 3m bags at R$343 ($149) a bag for federal stocks. She also said the government would help finance the storage costs of the coffee crop.
Starbucks is launching its first espresso branded with a place of origin – undeterred by the fact that Guatemala, home of the new “cocoa and baked spices” brew has declared a state of agricultural emergency because of rampant coffee tree fungus.
Guatemala’s blighted crops and 275,000 coffee farmers stand in sharp contrast to the pomp surrounding Monday’s launch of the Guatemala Antigua, the first time Starbuck’s customers anywhere will have a choice of bean for their drink.
Wake up and smell the coffee.
That’s the message Colombian coffee growers have for Bogotá as tens of thousands of them took to the streets this week.
The nationwide strike, the first in the country’s history, have resulted in road blockades in several provinces and violent clashes with security forces that left several people wounded.
Mother Nature has dealt Central America a lousy hand. Earthquakes, floods and hurricanes of biblical proportions have battered the isthmus over the years, but the latest natural disaster is a botanical one.
A plague known as “coffee rust” has hit the region’s top-quality arabica crop. Premium blends from coffee grown in Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama are much loved by aficionados.
Coffee giant Starbucks is keen on China. At its investor conference this week, the company said China would be its second biggest market by 2014, behind the US and overtaking Canada, and it aimed to have 1,500 stores in 70 Chinese cities by 2015, from 700 today.
And you can see why. As China Daily reported last month, Starbucks keeps on putting up the price of coffee in the country. It’s now more expensive to buy a Starbucks latte in China than it is in the US.
Coffee growers in Venezuela are up in arms about the government’s decision to raise the price at which they can sell their beans by only 33 per cent. Sounds like quite a lot, no? What could they possibly be complaining about?
Well, it just so happens that Venezuela has one of the highest inflation rates in the world, which the government has been trying to attack by freezing the prices of many products, like coffee. The thing is, production costs continue to skyrocket.
An American company trying to sell coffee to Latin America sounds like somebody selling ice to Eskimos or taking coal to Newcastle. Not least because the region produces most of the beans consumed worldwide.
Yet that is exactly what Starbucks is looking to do. This week, the Seattle-based coffee chain announced plans to ramp up its expansion in LatAm. The group said it wants to open ”several hundred” stores in Brazil in the next five years, to add to the 38 it currently owns, and open more than 300 new stores in Argentina and Mexico by 2015.
But will the region’s caffeine seekers bite?